Enemies are gathering and preparing attacks. What goes up must come down. :)

mcanerin

06-08-2005, 02:46 PM

As cynical as KLCC sounds, if I was buying stock I'd be shorting G right now - I think it's overpriced and due for a correction.

It's not that it's a bad stock or bad company, it's just that sometimes investors get overexcited and pay more than they should in the hopes that the upward trend will continue.

Ian

KLCC

06-08-2005, 04:21 PM

Way overpriced and as far as I know most of their income comes from online ads in Google and other publisher's sites. That's a very weak point comparing to what Yahoo! and MSN have although G is trying to buy some nice lookling things and trying to fix the hole... but this is just a bunch of different things who don't really work together besides that I don't really like any of them. My opinion.

We will see what happens...

andrewgoodman

06-08-2005, 11:53 PM

Any rational assessment of the stock price at ~$300 presumably needs to rest on the assumption that the company can comfortably "grow into" the current multiple. Doing only what they currently do it doesn't seem that it's possible to achieve that growth in a short time. Investors and analysts must be assessing what other rabbits G may have in the hat that will add new revenue streams with high growth potential (not just the "solid" growth we currently see in Google's current ad programs).

The financial markets are always a hornet's nest, but the deeper question is: has it really come to this? *Is* Google the largest or most valuable "media company" in the world?

It sounds far-fetched, but if we believe in search then we probably need to believe that companies like Google, not necessarily in their current form, will help consumers solve all sorts of daily problems. That potential is made more credible by the huge profitability of what they currently do, which limits downside risk, at least for awhile.

Sure, the stock is up there. But the really interesting question is: will a company like Google, which has already become fairly ubiquitous in people's lives, become even more so? Being short or long on a stock is one thing, but what are the "fundamentals" and trends that we are short and long on -- either emerging new applications for search that may hit the market in five years, or early-stage trends like Local Search pulling a lot of business away from traditional yellow pages companies? The analysts are crunching all those numbers, obviously, which is why many fund managers are not selling Google stock at this point, though they may not be buying, either.

seebach

06-09-2005, 10:48 AM

They certainly are reaching new peaks for a mediacompany!

But these guys have found a way to stop them:
google will eat itself (http://www.guerrilla-innovation.com/archives/2005/05/000431.php)

Qal

06-09-2005, 01:26 PM

Google's closest search industry competitor, Yahoo.com, is worth $27 billion less than the Mountain View-based search engine. Some fear Google's astronomical rise may have overpriced the company and brings back memories of the aforementioned tech stock days.

To bolster this fear, analysts point to the fact that Google totaled $3.2 billion in sales in 2004, as opposed to the $42 billion generated by Time Warner sales. Despite these misgivings, none of the analysts polled by Reuters listed Google's stock as a sell.

In that context, it's hard not to see Google living it's own mini boom-bust stock bubble based on unrealistic market expectations.

Just to remind people that AOL was once valued at over $164 billion (http://news.bbc.co.uk/1/hi/business/597479.stm).

It's also worth remembering that Google's revenues are riding almost entirely (http://www.platinax.co.uk/blogs/brian/archives/2005/05/why_the_gbrowse.html) on the back of a single software product produced by a rival internet company.

That's quite a considerable degree of expectation with such a high degree of vulnerability.

seo

06-09-2005, 11:01 PM

There have been some sightings around San Francisco concerning Google-camera-trucks

If this EXPENSIVE 3-D mapping project does happen - this will certainly justify their position as the #1 Media company

There will be many-many great surprises from Google by the end of the decade.

Their wealth will further developments that society could only imagine just few decades ago

and the intense competition with Y! and MS will reap extra-ordinary tools from everyone

In that context, it's hard not to see Google living it's own mini boom-bust stock bubble based on unrealistic market expectations.

Just to remind people that AOL was once valued at over $164 billion (http://news.bbc.co.uk/1/hi/business/597479.stm).

It's also worth remembering that Google's revenues are riding almost entirely (http://www.platinax.co.uk/blogs/brian/archives/2005/05/why_the_gbrowse.html) on the back of a single software product produced by a rival internet company.

That's quite a considerable degree of expectation with such a high degree of vulnerability.
Every company with an online presence, by this logic, depends on IE/MSFT. I'm sure most are willing to assume that antitrust laws will be upheld so that MSFT cannot shut the entire rest of the world out of profit related to web searching, search, etc.

I do agree that a Google browser seems like a necessity, but only if Microsoft's threat is particularly strong. That threat seems weaker to me than it did 18 months ago, insofar as Google and Yahoo have continued to shine in their niches.

I, Brian

06-13-2005, 06:50 PM

Every company with an online presence, by this logic, depends on IE/MSFT. I'm sure most are willing to assume that antitrust laws will be upheld so that MSFT cannot shut the entire rest of the world out of profit related to web searching, search, etc.

I do agree that a Google browser seems like a necessity, but only if Microsoft's threat is particularly strong. That threat seems weaker to me than it did 18 months ago, insofar as Google and Yahoo have continued to shine in their niches. Certainly I agree - the point was more one of commercial vulnerability - Google is being compared to companies such as Time-Warner, which has a powerful presence in various media formats and well-entreched resources and assets, thus offers greater flexibility and redundancy to react against market changes.

However, Google's revenues remain very vulnerable to a specific user base in a single marketing medium, which seems a very top-heavy business model - if IE failed to correctly parse AdSense code Google revenues would be extensively wiped out - and remember when Jen reported a scare (http://www.jensense.com/archives/2005/01/highly_publiciz.html) in January about an IE update blocking AdSense?

Overall point, in my inexperience, seems to be that Google market value seems very much driven on market expectations rather than market realities, hence the difference in valuation between both named companies. Whether Google can actually deliver on the level of expectation is obviously the key point of concern.

Nacho

06-13-2005, 11:13 PM

Appropriately, Henry Blodget weighs in:

http://www.fortune.com/fortune/subs/article/0,15114,1071159-1,00.html
Good article! there Henry notes:
The simplest way to frame the relative valuation question is to ask whether Google’s existing and future assets will generate more future cash than Time Warner’s existing and future assets. If one assumes that Google’s only significant revenue stream will be search, this seems a stretch: search may be mind-boggling, but it’s hard to believe it will generate more cash than television, magazines, cable, movies, and AOL combined. When one also factors in the value of Google’s traffic, brand, and market cap, however, the proposition seems reasonable. In 1998, when online “bookseller” Amazon surpassed Barnes & Noble’s $2 billion market cap, many deemed this absurd. Now, with Amazon selling everything under the sun, the disparity between its $15 billion and Barnes & Nobles’ $2.5 billion couldn’t seem more sane....

So Google investors can safely ignore the hysterical Time Warner comparisons. What they can’t ignore is the risk that, at some point soon, search growth will decelerate and Google’s FCF multiple will compress as momentum investors race for the doors.
The other thing that could make an impact on the stock price is the amount of FLOAT that is held on institutional hands compared to it's rivals or similar internet related companies. I hear GOOG is something like less than 1/3 held compared to the average. Then on top of that, if GOOG makes the S&P 500 list, all funds will have no choice but to take it into their portfolios. Simple economics of supply and demand should predict the stock's value after news breaks. From what I understand, this is one of the few occasions where "buy on the rumor, sell on the news" is not as accurate, because many funds a) can't afford to make that speculative call and b) there is not enough supply (float) to take.

My prediction is that the company will continue to grow in solid assets as Henry Blodget suggests, in value and profits. It's a solid company to have in my portfolio. So, if the stock falls a few dollars today or gains another 10% I really don't care. I'm in it for the long run.

dannysullivan

06-14-2005, 09:51 AM

This is Henry Blodget who entirely missed search as a growth area, right? And now he suddenly understands it. I have a dim view of many financial analysts in general. He certainly hasn't made me think he's got great insights into the search space.

Haven't seen the entire article, given I'm not a fortune subscriber. But looking at the point quoted"

search may be mind-boggling, but it’s hard to believe it will generate more cash than television, magazines, cable, movies, and AOL combined.
Ah, Henry, we're not talking search. We're talking ads, internet ads. Some of them are search targeted. A lot of them are contextually targeted. And anywhere Google can stick ads, they're going to. In addition, they're going to stick ads without all that overhead a pesky media company like Time Warner has to deal with, such as, you know, hiring writers, producers and people who generate content. Instead, they just depend on computers to mine the data that other people product to make GoogleMedia.

I'm sure a lot of dubiousness over Google's valuation is in order. I honestly don't know how anyone can say what it is worth, especially given that this company in particular seems to swing in new directions that even it doesn't know it's going into.

seobook

06-14-2005, 10:27 AM

Time-Warner, which has a powerful presence in various media formats and well-entreched resources and assets, thus offers greater flexibility
sometimes having the hand in too many cookie jars makes it far harder to react to market forces because you are so large and some of the numbers are covered up in the numbers.

andrewgoodman

06-14-2005, 03:15 PM

This is Henry Blodget who entirely missed search as a growth area, right? And now he suddenly understands it. I have a dim view of many financial analysts in general. He certainly hasn't made me think he's got great insights into the search space.

Haven't seen the entire article, given I'm not a fortune subscriber. But looking at the point quoted"

Ah, Henry, we're not talking search. We're talking ads, internet ads. Some of them are search targeted. A lot of them are contextually targeted. And anywhere Google can stick ads, they're going to. In addition, they're going to stick ads without all that overhead a pesky media company like Time Warner has to deal with, such as, you know, hiring writers, producers and people who generate content. Instead, they just depend on computers to mine the data that other people product to make GoogleMedia.

I'm sure a lot of dubiousness over Google's valuation is in order. I honestly don't know how anyone can say what it is worth, especially given that this company in particular seems to swing in new directions that even it doesn't know it's going into. I believe Henry now holds up a sign as he writes these articles: "Will analyze for food." Too bad he didn't just ask for a few shares of GOOG at the IPO price.

On the whole, the tone of his article is fairly streetsmart as you might expect. He explained the whole process of how fund managers have to keep riding bubbles until they collapse, and that for them, it's rational. First, funds have to stay invested in what their mandate is to invest in. If equities generally, they can't pull out of stocks. If tech stocks, they can't go to cash or even into other kinds of stocks. If they do, they may get fired. So they have the choice of quitting, getting fired, or trying to just ease back on the throttle slightly. Easing back on the throttle might mean dumping some more speculative names and hanging onto GOOG at $280 or AMZN at $320 back in the day. But they all know in advance that the valuations are pie-in-the-sky at a certain level. It's just that their firms -- driven, I might add, by the greed of ordinary investors and speculators -- require them to ride momentum plays in certain types of stocks.

Now if work for a value fund or better yet, if you somehow manage to run your own small money management firm, you can do totally different things.

One way or another, Google is a huge company by a few different yardsticks, but no one knows whether it'll keep going like this forever.

This all reminds me of a Canadian mutual fund company called Altamira, which is quite established now, but was an upstart 15 short years ago. The "star fund manager" was Frank Mersch. At the time there was a resource (commodities) bubble, mostly in oil and gas (sort of like now). Mersch ran the Altamira Natural Resources Fund, and people saw those newspaper ads showing 40% annual returns and started plowing into all the Altamira funds as a result. Another Altamira fund, also run by Mersch, was called the Canadian Equity fund, which made it sound like a diversified and possibly even blue chip stock fund. But the weightings were almost the same as the resource fund! This one grew at 35% a year, but few investors bothered to ask why -- it was because they were riding junior oil and gas plays with Cowboy Frank. These big numbers brought huge bucks into all of Altamira's funds, but they were destined to crash to earth. Eventually performance tanked and Mersch took time off for some kind of mental health thing (he made millions in performance bonuses)... eventually resurfaced with his own boutique firm, of course. Essentially, it was all premeditated. Ordinary investors really have to be careful. Firms like Mersch's, and Blodgets, make special situations and rampant speculation seem like part of some safe, conservative, or at least "managed" risk, when often that's not the case. They sanitize, or try to sanitize, an ugly reality. The sooner the average investor understands things are not as they seem, the better off they'll be.

Now about that housing boom....

Everyman

06-14-2005, 03:47 PM

Some people have short memories. Blodget was barred for life from the securities industry in 2003 by the Securities & Exchange Commission, the National Association of Securities Dealers, and the New York Stock Exchange. In February, 2000 Merrill Lynch took Pets.com public, and Blodget hyped it all the way until it went out of business in November. Google should start worrying if Blodget has anything positive to say about Google's current stock price.

http://www.google-watch.org/gifs/sockit.gif

Jonathan Mendez

06-15-2005, 01:26 PM

I like to look at G's growth potential from the perspective of the consumer who drives G's business. Even though G's revenue model is B2B its product offerings are consumer driven. How is G going to balance being an Advertising company and being a company that helps people in their lives (their stated mission)? That has been the delicate balance G has been dealing with ever since it launched AdWords and as it grows post IPO this issue becomes more complex and troublesome.

It's clear to Google and those of us that research online user behavior that G's audience by and large doesn't want, like or trust ads on G. G is an information resource and most people who use it have tunnel vision in an effort to complete their goals on the site. On the flip-side, for every company that is getting great ROI on AdWords as CPC goes up and up there are dozens more that are not (of couse they good SEM) ;). Where is this leading?

Let's take Gmail. I use it it every day and I think the technology behind it as good as it gets for an email web app (of course the same can be said for search and maps, etc.). In the almost one full year I've been using it I've yet to even notice a single ad on it. Yes, G is finding out a whole host of information about me but the second they start filling my inbox with contextual spam (or selling my info to third-parties) is the day I stop using the service. In fact, their spam filter is one of the very reasons I use the product. Here is the paradox that exists and that they have to figure out how to overcome. And of course the best technology does not always win the day.

This is a company that was built on the back of a clean and positive user experience. Know one knows this better than G. But I also think that no one knows how they can continue to grow long-term in an ad-supported model and maintain their user's expectations of the Google experience. We all know that Google is changing, and fast. What we don't know is the company that G morphs into one that users will prefer over the myriad of options that will always be at their fingertips. Maybe G's goals are too large? Maybe they are not large enough? The only thing I think we can say for sure is what will ultimately prevail is the same thing that made Google what it is today, user experience.

jewboy

06-15-2005, 03:23 PM

The Q: Who controls the media?
The A: SEO/SEM professionals

AussieWebmaster

06-16-2005, 04:57 PM

This is Henry Blodget who entirely missed search as a growth area, right? And now he suddenly understands it. I have a dim view of many financial analysts in general. He certainly hasn't made me think he's got great insights into the search space.

Haven't seen the entire article, given I'm not a fortune subscriber. But looking at the point quoted"

Ah, Henry, we're not talking search. We're talking ads, internet ads. Some of them are search targeted. A lot of them are contextually targeted. And anywhere Google can stick ads, they're going to. In addition, they're going to stick ads without all that overhead a pesky media company like Time Warner has to deal with, such as, you know, hiring writers, producers and people who generate content. Instead, they just depend on computers to mine the data that other people product to make GoogleMedia.

I'm sure a lot of dubiousness over Google's valuation is in order. I honestly don't know how anyone can say what it is worth, especially given that this company in particular seems to swing in new directions that even it doesn't know it's going into.
I heavily agree with you here Danny and think Blodgett has no clue about investing in the tech area and how it all holds together - as his own tech moves reflect.

Google should be around for a long time to come... they are diversifying their holdings and keeping in front of the curve... if they become complacent maybe a competitor gets the jump... but it is really theirs to lose and screwing it up royally would be required.

andrewgoodman

06-16-2005, 08:17 PM

Some people have short memories. Blodget was barred for life from the securities industry in 2003 by the Securities & Exchange Commission, the National Association of Securities Dealers, and the New York Stock Exchange. In February, 2000 Merrill Lynch took Pets.com public, and Blodget hyped it all the way until it went out of business in November. Google should start worrying if Blodget has anything positive to say about Google's current stock price.

http://www.google-watch.org/gifs/sockit.gif

You're telling us this like we didn't know that? You're comparing GOOG to pets.com?

Blodget actually mentions his past and the ban in the article.

Nacho

06-28-2005, 05:13 AM

An it keeps going, and going and going .....

http://biz.yahoo.com/rb/050627/tech_google_shares.html?.v=1

Long live the Bulls!

AussieWebmaster

06-28-2005, 11:08 AM

An it keeps going, and going and going .....

http://biz.yahoo.com/rb/050627/tech_google_shares.html?.v=1

Long live the Bulls!
Hey it would be nice if it hit the number Buffet's are at right now... my 100 shares would be worth 8.3 million!!!!

Nacho

06-28-2005, 01:56 PM

Hey it would be nice if it hit the number Buffet's are at right now... my 100 shares would be worth 8.3 million!!!!
I don't do many of these... but this is an official ME TOO post. :)

I'm with you, it will make my grandchildren very happy.

AnthonyCea

07-17-2005, 12:12 AM

Google insiders are selling now and have been for quite a while.

Wall Street has pushed the stock up, when they are ready to short it, which will not be much longer, all the analysts at the Wall St. firms will start trashing the stock at the same time to cause a selling panic.

With a PE of 120 Google must show some great earnings and I think they have been doing it by reducing payouts to publishers and it can only get worse for webmasters.

If Google does come out with it's own browser what will they need webmasters for?

They can run all the ads directly from the browser using content from any page and webmasters will not get a dime if they run ads in this manner.

PS: I tried to attach an image of the insider transactions by an attachment, but the file sizes are set way too low on this forum so if anyone wants to see the latest insider transactions go to www.bigcharts.com, punch in the stock symbol "GOOG", wait for the chart to come up with the current quote, then click on the "insiders" tab and you can look at all of the recent insider sales for the last 3 months or so.

You will see that Larry, Sergey and Eric have been selling a lot of stock.

AussieWebmaster

07-17-2005, 11:31 PM

I don't do many of these... but this is an official ME TOO post. :)

I'm with you, it will make my grandchildren very happy.
My son goes to college in eight years.... I need a few more like this to help tution costs.... I think Baidu may be a solid play too.... Got to love the Chinese market....

Nacho

07-18-2005, 07:21 AM

My son goes to college in eight years.... I need a few more like this to help tution costs.... I think Baidu may be a solid play too.... Got to love the Chinese market....
In all honor to Henry Markowitz diversificaton model, by investing in Google I have found it to be a globalized and well diversified investment within it's internet revenue model streams. I wonder what impact will be when Google starts making revenue models in the offline world. I have my own expectations that they will someday make an amazing contribution to the world in the medical field.